Life as a renter can come with many pitfalls in Iowa City. Rolling her eyes as she began a list of her own grievances, RaeAnn Nordmeyer leveled her anger at one particular apartment she rented in 2002.
“In the middle of winter, [AUR Managements] decided to paint all the woodwork in our apartment,” Nordmeyer said of 806 E. College St. “It took them a day or two to finish it. There were horrible fumes, which gave us headaches and made us sick, and we really couldn’t open the windows, so we stayed with other people.”
But Nordmeyer, like some Iowa City residents, has given up on large management companies and apartment complexes in favor of other alternatives such as landlords who rent out one property instead of dozens. Many are even buying houses without long-term plans to live in them.
With her fiancé, Nordmeyer, a 28-year-old high school English teacher and University of Iowa graduate student now rents a two-bedroom house at 1117 Ash St. in a quiet middle-class neighborhood near Kirkwood campus. Nordmeyer said that she hit it off right away with her landlord, who bought this house but then moved in with her boyfriend somewhere else. When it was discovered that Nordmeyer was a teacher, she said, and would probably make good tenet, the landlord decreased the rent by $200 and changed the lease to allow cats.
“She seemed like my kind of person,” Nordmeyer said, “and she reminds me of my mom.”
Although renting remains a popular option especially for younger residents who might move more frequently, many have done away with leases and purchased their own homes.
In 2005 Darcy Burnett, 29, moved back to Iowa City after years of wandering the globe. In addition to Chicago and Kansas City, she spent several years teaching English in exotic locales such as Japan, Korea and India. When the time came to find a place in Iowa City, Burnett said that she was fed up with renting – especially considering one of her last Iowa City rentals nearly ten years ago.
“The place wasn’t well kept by the company that owned it,” Burnett said before her shift as a bartender at the Deadwood. “There were so many cockroaches. It was really bad – and we didn’t leave food out.”
Instead, Burnett took the money she saved in Korea and bought a house. She settled on the first property she looked at, an aged two-story home built in 1910. One alluring aspect of this building, she said, was the separate upstairs apartment with its own kitchen and bathroom, allowing her to rent it out. Now a landlord to her friends, she is able to use the extra money to fix appliances such as a furnace and pay off bills that as a renter she never encountered.
“I hadn’t planned on taking more than one tenet but it made sense,” Burnett said. “I can pay off my mortgage, save money and give my friends a cheap place to live.”
Burnett learned through trial and error that homeownership involves a unique set of problems, usually unknown to many renters. During her first tax season, she did not save enough money, causing some financial strain. Now everything is much smoother, and the benefits for Burnett outweigh the additional responsibility.
“I prefer to be on my own and take care of everything,” Burnett said. “The biggest reason to buy is to be more in control of your own life.”
Generally, there are many perks that result from purchasing a home, said Jeff Bill, vice president of the Iowa City Area Association of Realtors, which oversees ethics and business practices for its members. For taxes, he said, you can write off the interest on mortgage payments, and you personally gain more equity with each payment unlike a rental. In Iowa City, Bill said, property values have consistently appreciated in value throughout the years.
And he added, “It’s the American dream to own a home.”
Although homeownership endures as a matter-of-course for many renters, economic forecasts for the housing market have turned bleak within the past year. According to the Global Insight, which provides worldwide analysis of market conditions, in 2008 nationwide home sales are predicted to decline by 10 percent, and foreclosures on homes are expected to increase by more than 1.4 million.
In Iowa City, Bill said, homeowners can typically expect to make a profit after three years, but nothing is certain. A house’s profitability depends on market conditions and how well the property is maintained, he said.
“I’m aware of the market, but it’s not a huge concern for me. It’s still better than renting,” said Josh Newman.
Five years ago Newman, 32, a job coach at Goodwill Industries, bought his first home from his landlord who wanted to get rid of the place. Because he was 27 years old, he had some apprehensions about such a major commitment.
“I thought it was crazy because I was a single guy,” he said. “But the payments were $100 less [each month] than when I was renting the place.”
After two years, Newman said that the neighborhood was going downhill so he sold his house at 311 Douglas St. for a profit of $7,000.
During this time Newman saw a for-sale sign at 442 W. Benton St. and quickly decided to purchase this single story, two-bedroom home since it was so close to downtown. Once again he forwent a real estate agent and made the arrangements himself by going to the bank for a credit check, which procured for him a 30 year mortgage. From start to finish, he said, the process took less than 2 months. He also found a roommate to alleviate expenses.
Although Newman spent $200 on a housing inspector for his first house, he went with his intuition on the second one – a decision that Jeff Bill does not recommend.
“Hire a professional home inspector and make sure you know what you’re buying,” Bill said. “Also, go along with the inspector so you learn more about the house – how to check the furnace and how to check the insulation in the attic.”
Although Newman now must pay property tax and insurance as well as unexpected bills such as a new furnace and a new sewer line, he is still enthusiastic about his decision to move beyond renting.
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